March 31, 2010
ROBERT J. TRIFFIN, PLAINTIFF-APPELLANT,
PROFESSIONAL RECOVERY SERVICES, INC. AND WACHOVIA BANK, N.A., DEFENDANTS-RESPONDENTS, AND DOUGLAS WATFORD, DEFENDANT.
On appeal from the Superior Court of New Jersey, Law Division, Special Civil Part, Cumberland County, Docket No. DC-6904-08.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued March 15, 2010
Before Judges Baxter and Alvarez.
Plaintiff Robert Triffin is in the business of purchasing dishonored negotiable instruments from check-cashing companies. Thereafter, as an assignee, he seeks to collect the face value of the dishonored check from the bank that deemed the check fraudulent and had consequently refused to debit the purported payor's checking account. He appeals from the grant of summary judgment to defendants Wachovia Bank, N.A. (Wachovia) and Professional Recovery Services (PRS). We agree with the motion judge's conclusion that Triffin is barred by the Court's decision in Triffin v. TD Banknorth, N.A. (Banknorth), 190 N.J. 326 (2007), from seeking recovery against Wachovia and PRS. We reject Triffin's claim that because his cause of action was equitable rather than statutory in nature, the Court's opinion in Triffin v TD Banknorth was distinguishable. We affirm.
On November 14, 2008, plaintiff executed an assignment agreement with Cumberland Check Cashing (Cumberland), in which Cumberland transferred to plaintiff all of its rights and interests in a check that had previously been dishonored by Wachovia. The check in question was payable to defendant Douglas Watford in the amount of $1,212.06 and was purportedly drawn on an account that PRS maintained at Wachovia. Wachovia returned the check to Cumberland, deeming the check counterfeit. Because Wachovia dishonored the check, it refused to transfer the $1,212.06 from PRS's account to Cumberland, thereby causing a loss to Cumberland in the amount of the dishonored check. For a reduced price, Cumberland assigned its rights against Wachovia and PRS to plaintiff.
On December 18, 2008, plaintiff filed a four-count complaint against PRS and Wachovia. In count one, he alleged that because Wachovia violated the "midnight deadline" of N.J.S.A. 12A:4-302*fn1 by waiting until after midnight of the day Cumberland presented Watford's check for payment, Wachovia had forfeited its right to dishonor the check. Plaintiff consequently maintained that by refusing to pay Cumberland the $1,212.06, Wachovia had engaged in "theft . . . of money through false pretenses" that "unjustly enriched" PRS "at the expense of [Cumberland], and now [plaintiff] as [Cumberland's] assignee." The first count concluded with a prayer for relief stating that "as a matter of equity, plaintiff . . . demands judgment against defendant[s] . . . in the amount of $1,212.06."
In count two, which named only Wachovia as a defendant, plaintiff alleged a violation of 12 C.F.R. 229.51 because the "photo in lieu" document that Wachovia returned to Cumberland did not bear the advice required by that regulation, namely "this is a legal copy of your check. You can use it the same way you would use the original check."
The third count named only Watford as a defendant, and alleged that Watford was liable to Cumberland and to plaintiff by reason of his unlawful action. Watford was never served, has never appeared in the action and has raised no claims on appeal.
The fourth count alleged a violation of the Consumer Fraud Act by Wachovia and Watford, for which plaintiff sought treble damages.
On February 20, 2009, two months after Triffin's complaint was filed, Wachovia moved for summary judgment. Wachovia argued that in Triffin v. TD Banknorth, supra, 190 N.J. at 328-29, a case involving this same plaintiff, the Court held that Triffin had no standing to seek recovery of the face amount of the check -- even if the bank had violated the midnight deadline rule -- because Triffin had purchased the check with full knowledge that the check had already been dishonored. The motion judge agreed with Wachovia's argument that Triffin v. TD Banknorth was dispositive and granted summary judgment to Wachovia.
PRS also moved for summary judgment, although on different grounds. PRS argued that plaintiff had not pled any of the elements of his unjust enrichment claim against PRS. The judge agreed, and granted summary judgment. Confirming orders were entered on June 26, 2009.
On appeal, Triffin presents the following claims for our consideration:
I. THE TRIAL COURT MISAPPLIED THE CONTROLLING LEGAL STANDARDS, AND COMMITTED REVERSIBLE ERROR, WHEN IT GRANTED SUMMARY JUDGMENT IN FAVOR OF PROFESSIONAL RECOVERY SERVICES AND WACHOVIA BANK
II. THE TRIAL COURT ABUSED ITS DISCRETION [AND] COMMITTED PREJUDICIAL AND REVERSIBLE ERROR, WHEN IT DENIED TRIFFIN'S MOTIONS TO COMPEL DISCOVERY AND FOR A N.J.R.E. 104 HEARING
III. NEW JERSEY SHOULD EXTEND ITS ASSIGNMENT LAW TO INCLUDE CLAIMS IN EQUITY TO RECOVER STOLEN PROPERTY, AND CLAIMS UNDER NEW JERSEY'S CONSUMER FRAUD STATUTE
We review the trial court's grant of summary judgment de novo. See Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998). Employing the same standard the trial court uses, ibid., we review the record to determine whether there are material factual disputes and, if not, whether the undisputed facts viewed in the light most favorable to plaintiff nonetheless entitle defendants to judgment as a matter of law. See Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).
In Point I, Triffin maintains that the trial court committed reversible error of law by misapplying the summary judgment standard when it barred the unjust enrichment claim he asserted in count one of his complaint. By casting his cause of action as one arising in equity, Triffin seeks to avoid the holding of Triffin v. TD Banknorth, in which the Court framed the issue in the following terms:
The question presented in these consolidated appeals is whether an assignee of the rights and interests in a dishonored check is entitled to enforce the midnight deadline of N.J.S.A. 12A:4-302 against a payor bank, thereby making the bank strictly liable for the check, regardless of whether it was properly payable. [Banknorth, supra, 190 N.J. at 327.]
The Court answered that question in the negative, holding that the trial court correctly granted summary judgment dismissing Triffin's complaint because only a financial institution has the right to maintain a cause of action for a violation of the midnight deadline rule, and that Triffin, who had purchased the check knowing that it had been dishonored, had no right to maintain a cause of action. Id. at 329. The Court reasoned:
[A]fter [the check's] untimely return and with full knowledge of its dishonor, [the assignee] has no vested interest in the timely payment or return of these checks . . . . Any argument to the contrary would misconstrue the nature of an enforcement action under [N.J.S.A. 12A:4-302]. It is a cause of action for a breach of statutory duty, not an action for collection of a negotiable instrument. [Id. at 329 (quoting Triffin v. Bridge View Bank, 330 N.J. Super. 473, 478 (App. Div. 2000)) (first alteration added).]
We agree with the motion judge's conclusion that Wachovia and PRS were entitled to summary judgment in light of the Court's holding in Triffin v. TD Banknorth that plaintiff has no standing, as an assignee, to sue for recovery of the face amount of an already-dishonored check. See ibid. The motion judge was also correct when he rejected Triffin's claim that because his cause of action sounded in equity, and was not a statutory cause of action based on the "midnight deadline" rule of N.J.S.A. 12A:4-302, Triffin v. TD Banknorth was inapplicable. It is not the label a plaintiff affixes to his cause of action that controls; it is the substance of the cause of action. Couri v. Gardner, 173 N.J. 328, 340 (2002) (holding that courts are not bound by a plaintiff's description of his cause of action as a breach of contract action if, in reality, the complaint alleges legal malpractice).
Regardless of the nomenclature plaintiff has used, it is beyond dispute that he is asserting a statutory cause of action that is premised upon a violation of the midnight deadline rule of N.J.S.A. 12A:4-302, which is the very cause of action the Court held in Triffin v. TD Banknorth that Triffin was barred from maintaining. Supra, 190 N.J. at 329. The motion judge's reliance on Triffin v. TD Banknorth was correct. We therefore reject Triffin's contention that the motion judge improperly barred the unjust enrichment claim he asserted in count one of his complaint.
Counts two and three of Triffin's complaint were premised on statutory, not equitable, causes of action. We need not address those claims in any detail as we are satisfied that by virtue of Triffin v. TD Banknorth, Triffin is barred from asserting such claims. We therefore reject the balance of the arguments Triffin presents in Point I.
In Point II, Triffin argues that the trial court abused its discretion and committed reversible error when it denied his motions to compel discovery and for an N.J.R.E. 104(a) hearing. This argument lacks sufficient merit to warrant discussion. R. 2:11-3(e)(1)(E). Suffice it say, no facts garnered in discovery could conceivably confer standing on Triffin to maintain the claims the Court decisively barred him from asserting when it decided Triffin v. TD Banknorth.
In Point III, Triffin maintains that "New Jersey should extend its assignment law to include claims in equity to recover stolen property, and claims under New Jersey's Consumer Fraud Statute." In light of our conclusion that Triffin lacks standing to pursue a cause of action related to checks he purchased when he already knew that such checks had been dishonored, we decline to consider this claim, as it lacks merit. Ibid.